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Condo tribunal won’t award costs to winning litigants

Laura Glithero says costs consequences play an important role in the civil litigation system because it encourages the parties to reach reasonable resolutions and it discourages frivolous litigation.

The new Condominium Authority Tribunal — the province’s first of its kind launched last November — is designed to quickly resolve condominium disputes.

But the tribunal will not award the cost of lawyers’ fees to winning litigants, barring exceptional circumstances. And that may have both a positive and a negative impact for its users, say lawyers.

The new tribunal is initially only dealing with records-related disputes. Condo unit owners who are searching for more information, for example, about condo board decisions or someone serving as a director on a board have a place to turn if they’re not satisfied with the board’s response.

The goal was to create a process that was quick, convenient and affordable for litigants to settle and decide condominium-related disputes in Ontario and transform how disputes are resolved, according to the province’s guidelines.

James Davidson, a founding member of Davidson Houle Allen LLP Condominium Law in Ottawa, says the tribunal could add a greater burden upon condominium managers. They are already dealing with the gradual rollout of sweeping changes to Ontario’s Condominium Act, which have started to come into force.

Davidson is concerned that many of the litigants appearing before the tribunal will end up being condominium building managers, most of whom are not trained in legal processes and already are potentially over-stretched, as they work through the many amendments to the Condominium Act.

“The rules say that lawyers can represent parties to a dispute before the tribunal, but the rules also say it would only be in the rarest of circumstances that the tribunal would award the winning party its costs for legal representation,” says Davidson. “You could have a lawyer involved, but the cost, in many situations, could be prohibitive.”

The tribunal, however, can award the fees for the process, up to $200. By removing the risk of a significant cost award, litigants may well find the new tribunal more financially accessible, compared with other courts and tribunals where costs are awarded.

“I am a little bit concerned about the increased burden that this could place on condominium board members and managers because it could mean that they’re going to be dealing with these tribunal processes on their own,” says Davidson.

“I think this might just be an added pressure because they won’t be able to look to their legal counsel to assist them, they won’t be able to have the possibility of recovering those costs back in cases where owners bring disputes that aren’t justified,” he says.

Laura Glithero, a partner at Cohen Highley LLP Lawyers in London, Ont., hopes the tribunal will award costs for the additional issues it is expected to hear. While the tribunal is only responding to records-related issues, it will be dealing with a wider range of disputes in the future.

“As the tribunal expands, I would hope that the tribunal board members are given more flexibility when it comes to costs consequences in order to ensure that innocent unit owners aren’t bearing the costs,” she says.

Costs consequences play an important role in our civil litigation system, she adds, because it encourages the parties to reach reasonable resolutions and it discourages frivolous litigation.

Meanwhile, she expects that law firms will continue to help resolve issues people encounter in condominium disputes, before they get to the tribunal. She is currently working with condo boards on records issues to help them determine what information needs to be disclosed and what is exempted, under the newly revamped Condominium Act.

Glithero sees the role of paralegals expanding to assist in condo-related matters. A paralegal at her firm, Cohen Highley LLP, has been responding to records issues in which the firm’s clients — condominium corporations — have become involved. That helps contain the costs for condo corporations, if they’re responding to something that can’t be resolved at the initial stages.

“As lawyers who represent condo corporations, we’re going to do our best to make sure those costs are minimized,” Glithero says.

Davidson’s firm in Ottawa is taking a similar approach.

“One of the things we’re going to be doing here is we’re going to [be] training up a paralegal and/or a junior lawyer to deal with these tribunal processes as inexpensively as possible, so at least we can offer a service to our clients if they want it,” he says.

But, inevitably, some of the issues will require the intervention of lawyers, says Christopher J. Jag­lowitz, a lawyer with Gardiner Miller Arnold LLP in Toronto. He expects that in some situations, condo corporations will have to acquire legal help because they have the obligation to protect their organization and ownership. And that’s where he sees one of the advantages of the tribunal operating online, instead of in a bricks-and-mortar facility.

“The condo authority process is intended to be cheaper and simpler,” he says. “If I can jump in and out, online in a session, and assist a client in that way, it should be more efficient.”

Jaglowitz expects the unmeritorious claims to be weeded out quickly and the tribunal to issue summary decisions for the cases it does look at. The intent is to not have lengthy hearings with discoveries and submissions, he says.

At the same time, he sees potential to “shape the behaviour” of condo managers who don’t understand or respect the process, so they learn from their experience and don’t turn to the tribunal with frivolous claims. This could ultimately reduce the number of disputes, he says.

The Condominium Authority Tribunal lays out a three-stage process, allowing those involved in disputes to achieve a resolution at each stage, beginning with negotiating in a neutral forum, followed by mediation, if that is unsuccessful. If there’s still no resolution, they can seek a tribunal decision through a formal adjudication.

The elimination of cost awards may well provide an incentive for condo owners to assert their rights, Jaglowitz adds.

Jaglowitz, who co-chaired the dispute resolution section of the government’s working group leading to the Condominium Act changes, says the online model provides a smaller footprint, which is important. But expenses related to the tribunal’s operations are a major factor because the government only provided the seed money for the launch of the new tribunal. It is otherwise intended to be self-funding through Ontario condo unit holders.

“I think it’s a fantastic idea; it’s an idea whose time has come,” he says.

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